We race our Tartan 27' against a std. rig O'Day 25'. The O 25 does quite well and sometimes gets the better of us. That may be because the skipper is older, smarter, more devious but the boat is up to it. They use a 9.9 HP outboard mounted on the transom.
I believe this is the spec for the tall mast version: O'DAY 25 CB TM sailboat specifications and details on sailboatdata.com
The O 25 is a good choice for your local waters (Narraganset & LI Sound) and you can work your way up to making longer hops.

You are going to want to get Yanny GM1 working. 1 cylinder diesels are notorious for being able to loosen fillings! I don't know how much you know about diesels but I have found this book by Nigel Caulder to be a great resource of information about diesel engines: